KOTTAYAM: The tyre and tread rubber manufacturing units in the country are heading for a severe crisis, as carbon black, a critical raw material for production,is in short supply.
The Indian carbon black industry is controlled by 4 major manufacturers. But it is a proven fact that the manufacturers do not have the capacity to meet the requirement of the Indian market.
However, the allegation is that the Commerce Ministry has taken certain steps to prevent the import of carbon black,resulting in severe shortage of the input for the tyre/tread rubber manufacturing units. The situation has become so critical and many factories, especially the tread rubber making units in the State, are lying closed now.
The crisis is borne out of a notification issued by the Ministry of Commerce (No 81(RE-2008- )/2004-2009), dated January 16, 2009 and amendment thereon, restricting import of carbon black if its landed cost value is less than Rs 80 per kg, while the current Indian price of the same product is well below the suggested price. In addition to this,the Director General of Anti Dumping and Allied Duties, Ministry of Commerce, by its preliminary findings dated May 25,2009 has imposed anti-dumping duty on carbon black imported from Australia, China PR, Russia and Thailand,at the rate of an approximate Rs 6,000/tonne.
The situation induced by the recent policies imposed by the Commerce Ministry has made black rubber goods manufacturers completely dependent on the Indian carbon black manufacturers, who are free to raise their prices at will. Taking advantage of this, the Indian carbon black manufacturers, who are now apparently acting as a cartel, have increased their prices exorbitantly up to 12-13 percent and restricted their supplies to small manufacturers, it is alleged.
The position taken by the Commerce Ministry is adversely affecting Indian exports too. For instance,the tread rubber industry is exporting to more than 35 countries worldwide. The Ministry of Commerce & Industry has given STAR export house recognition to some tread rubber manufacturers for excellent growth posted in exports. Restrictions on importing carbon black at internationally competitive prices will make exports from India totally uncompetitive.